Indian govt likely to reject Apple's requests for tax, trade concessions

Apple in hopes of expanding its sales and presence in India, has been planning on establishing a manufacturing unit in the country. The Cupertino tech giant, in a letter to the Indian government last month, outlined its plans and even sought for financial incentives to move forward with their plans.

If Apple’s plans would actually work out then the company would open its own stores in India and sell their products at a much cheaper price. However, a new report published by the Financial Express suggests that the Indian government is likely to reject tax or trade concessions for Apple’s manufacturing deal.

“Since there is a strong correlation between value-addition and job creation, value-addition remains a priority for us,” said a government source quoted by the publication. “The Make In India program would suffer if every foreign player starts to demand concessions without actually doing much of value addition here,” the source added.

Make in India is an initiative launched by the Government of India to encourage multi-national and national companies to manufacture their products in India. The programme was launched by Prime Minister Narendra Modi on 25 September, 2014.

Apple’s requests include a 15-year tax holiday on imported components and equipment as well as a waiver on customs duties for the latter whether new or used. Another report published by the Indian Express suggests that Apple is asking for total exemption from duties on materials, components and capital equipment.

The Indian smartphone market is increasingly growing. According to research firm IDC, India is expected to overtake US as the world’s second-largest smartphone market. Apple’s team is scheduled to meet the government officials today to discuss the plans.